Consumer Insurance Blog

In the wake of Michael Jackson's untimely death at a relatively young age, much is riding on the results of his autopsy and a ruling on the cause of his death. Anschutz Entertainment Group (AEG) is estimated to have about $40 million at stake, depending on the cause of his death. According to Billboard, about three-quarters of a million concert tickets had been sold and AEG plans ticket refunds of about $85 million.

As part of the event planning, AEG sought and secured event cancellation insurance from Lloyd's of London. This type of insurance is particularly important to protect all parties against unforeseen losses due to any number of problems - sudden unavailability of a venue, catastrophic weather that might force a cancellation, or ill health on the performer's part, to name a few examples. In the past, Jackson has canceled shows in the latter parts of his tour for ill health or exhaustion. Earlier this year, when AEG was arranging for insurance coverage, Jackson had to pass a four-hour medical exam attesting to his health.

But like any insurance policies, there are exclusions. If Jackson's death was due to a reason that was excluded in the policy - such as a pre-existing medical condition or a substance abuse problem - the promoters could be left holding the bag. While autopsy results so far have been inconclusive, ongoing investigations into Jackson's death are occurring. And with the amount of money at stake, it wouldn't be unusual for an insurer to conduct their own investigation.

Business insurance for large events
Rock concert promoters aren't the only parties that might need event cancellation insurance. This is a common type of insurance sought by corporations and businesses that sponsor major events, conferences, and trade shows and depend on revenue for those events. Determining whether of not cancellation insurance is needed and how much is generally a matter of scale, based on the number of people involved and the amount of financial and other risk involved in the event.

"Whether planners should invest in cancellation insurance depends upon how important an event is to an association or corporation financially and what kind of risk it is assuming. “If you're holding a board of directors meeting for 65 people that wouldn't generate income and was inexpensive to hold, there's no point,” explains James M. Goldberg, an attorney with Washington-based Goldberg & Associates. “But if it's a big annual event for 3,000 people that's a major source of revenue, definitely think about insuring."

Event insurance can cover unforeseen problems, and "... perils that are beyond the control of a planner, such as inclement weather, a principal speaker dropping out, strikes, outbreaks of disease and so on." But experts caution that it will not cover poor planning or poor attendance.

Personal events such as weddings may benefit from insurance, too
Beyond businesses, private events can also sometimes benefit by similar types of coverage. As the average cost of a wedding climbs - in the U.S., it is between $20,000 and $30,000 - wedding insurance is increasingly common. Wedding insurance can cover costs for cancellation due to weather, illness, or venue unavailability. It can also cover losses if gifts are stolen, damage or loss of photos, rings, gowns, and the like, and other unforeseen problems. If you are planning a costly reception, you may want to discuss wedding insurance options with your agent. In addition to insurance for cancellation or other problems, your reception venue may require liability insurance. You should also be sure to verify that your wedding venue and your vendors are properly insured, and learn exactly what and how their insurance might extend to cover any problems you might experience.

If you’re planning a trip to a vacation home, it's a good idea to think about insurance coverage before you go. Whether you plan to vacation in a second home or visit a time share, a rental property, or a home exchange, the National Association of Insurance Commissioners (NAIC) offers useful vacation home and property insurance considerations.

It's a good idea to check your policies to be clear about the extent of what they will and won't cover while you are traveling and staying in some type of temporary lodging - generally, a Homeowners policy will extend some coverage for your personal belongings. Also, be sure to review any trip or travel benefits or coverage that might be available from your credit card.

If you have a second home for vacation use, the insurance issues require more consideration. Homeowners coverage for a second home can vary significantly from the terms in your principal home’s insurance policy and requirements may be different if you are in a different state or a different area. Your coverage needs will vary depending on how often your home is occupied and whether the home is for your own use - owner occupied - or whether you rent it to others. You may need additional coverage if your vacation home is a waterfront property or if it is located in an area that is subject to natural disasters such as hurricanes or floods. You may also need additional coverage such as boat insurance or "named peril" insurance.

We often don't think about insurance until we need it - and then, it can be too late. If you haven't considered the insurance issues related to a second vacation home or to temporary vacation lodging, you might want to give your agent a call.

Especially in this tough economy, The National Association of Insurance Commissioners (NAIC) is warning consumers to keep their guard up to avoid becoming victims of insurance fraud. When it comes to insurance pricing, it's best to adhere to the old adage of "if it seems to good to be true, it probably is." According to NAIC:

"Fake insurance companies and dishonest insurance agents can defraud consumers by collecting premiums for bogus policies with no intention or ability to pay claims. Phony home, health, life and auto policies typically are offered at rates that are significantly lower than the traditional market price in order to woo consumers who are trying to save money."

They suggest that if you are unsure of the company or agent that you are dealing with, take these three steps:

• STOP before signing any paperwork or writing a check
• CALL your state insurance department, which is easily reached by phone
• CONFIRM that the company or agent offering insurance is legitimate and licensed in the state.

It can also be helpful to keep informed about common fraud schemes. The Coalition for Insurance Fraud posts consumer insurance scam alerts and they feature a good list of insurance fraud links for consumers. The FBI also posts updates for common fraud schemes. Be sure to keep an eye out for your senior relatives and friends too - senior citizens are prime targets for various types of fraud, including insurance fraud.

June 7-13 is Tire Safety Month, an event organized by the Rubber Manufacturers Association to promote safety and to raise awareness about proper maintenance and care. According to the National Highway Traffic Safety Administration, more than 600 deaths and 33,000 injuries per year are due to under inflated tires. And in addition to being a safety hazard, tires that are improperly inflated also lower a car's fuel efficiency. Consumer Reports offers tips on tire maintenance.

Conventional wisdom has been to use a penny to measure tire tread for safety, but Consumer Reports notes that based on driving performance in a battery of tests, using a quarter would be a safer gauge:

"It has long been the standard that tires are worn out when their tread depth reaches 1/16 inch (or 2/32 inch as found on standardized tread-depth gauges). The easiest way to measure this, if you didn't have a gauge, was to hold a penny upside down in the tread. If the top of Lincoln's head was visible, you needed new tires. See test results of foul weather comprises with worn-out tires.

But CR's tests show that using a penny is too stingy and that most consumers should consider replacing their tires when the tread reaches 1/8 inch."

Experts at the Tire Rack, an independent tire tester, suggest that measuring tire tread via the quarter method can improve braking distances up to 24 percent. See a quick tutorial for using coins to measure tire depth.

In addition to maintaining good tire pressure and tread, the age of your tires can be a safety factor - rubber breaks down over time. Many safety experts suggest replacing tires that are more than 5 years old to avoid the potential for a blowout or tread separation.

This post was written by Pat Long of Eldredge & Lumpkin Insurance Agency

There’s been more than one occasion when a customer called or visited to report a claim, and I have had to tell them they are not covered. Talk about a very uncomfortable conversation!

Insurance is an intangible; you don’t need it until you need it. You pay premiums, sometimes high premiums. And often you never use the coverage. So, when you have a claim under homeowner’s insurance, auto, liability, or worker’s compensation, you want it covered, right? Then why are some claims not covered by insurance?

Policies as Contracts
An insurance policy is a legal contract between you, the insured, and the insurance company. You sign the application and pay the premium, and the insurance company sends you a policy. All policies define who the insured is, and they tell what the company is willing to cover. But sometimes coverage and claim do not match.

Exclusions
These are specifically noted perils that the company will not cover. For example, some homeowner’s policies exclude coverage of flood damage. Many people in Louisiana did not understand this when Hurricane Katrina hit. You can purchase a separate flood policy, but flood damage is not covered by the basic homeowner’s policy.

Conditions
These are general rules or procedures that the insurer and insured agree to follow, under the contract. When you sign the application and pay the premium, you agree to these conditions. For example, did you know you have duties after a loss? In order to claim a loss, you need to promptly notify the insurance company or agent; some policies have specific notification deadlines. If you have theft coverage, you’re required to notify the police. If a tree falls on your home and opens a hole in the roof, you must protect the property from further damage and make reasonable and necessary repairs to protect the property. Most policies require you to cooperate with investigations and settlements. If you don’t meet these conditions, the insurance company can deny the claim.

So what’s the best way to make sure you are properly covered? Simply think about what is important to you:

• Do you worry about cost of health care when you get older?
• Are you concerned about your 16-year-old son or daughter driving?
• Have you inherited an heirloom and wish to pass it on to your family?
• Do you have an older home with systems that no longer meet state requirements?
• As a business person, have you just signed a contract to build three more homes?
• Do you have an office in your home?

Ask your insurance agent how best to cover what is important to you. Taking a proactive approach to insurance may avoid the discomfort of the "you’re not covered" discussion.

Millions of people are sharing real time activities with friends, family and colleagues through online social networks like Twitter and Facebook. If you are one among those millions, be aware that there may be some other parties that find your tweets fascinating, too ... such as your local burglar. Recently, an active social networker Twittered about his trip only to find his home had been burglarized while he was away. While this could be coincidence, the victim thinks that it might be related to his public postings - and the news media seems to think so too - see a newsclip about the robbery.

There are likely to be many more reports of this incident since it is being heavily tweeted and it seems to have piqued the "mainstream" media's interest, too. Although the media likes to hype stories about crimes related to online activity, these types of opportunistic crimes have been going on long before social networks existed. Wiley burglars are often known to target funeral goers based on obituaries printed in newspapers or after seeing families pack the car for a trip. With basic precautions, social networking may be no more unsafe than other "real world" activities. In fact, increasingly, social networks are being harnessed by citizens and police departments to help solve crimes.

So while this incident shouldn't be blow out of proportion, it should serve as a cautionary tale of the potential downside of real-time transparency in social networks - particularly if you've attracted a following of people that you don't know very well - or at all. Take sensible precautions and think twice about what and when you share - and with whom.

It's also a wise to take home security precautions when you plan to be away on vacation - there are definite steps you can take to reduce the likelihood of your being victimized. And while nothing can take away the feeling of violation that happens after a burglary, being insured properly can help you to financially recover from a loss. If you have work equipment, antiques, or valuable collections, talk to your insurance agent about whether you need an endorsement or a rider to expand the coverage limits of your existing policy.

If you are one of the more than 8 million households fortunate enough to have a private swimming pool on your property, responsibility for safety comes with the privilege. Each year, 280 children under 5 years old drown every year in swimming pools across the country. For children aged one to fourteen, drowning is the second-most common cause of accidental death. Even if you don't have children, be aware that about a third of all child pool deaths happen at pools where the owners have no children.

The Pool Safety Council offers these tips to keep kids safe:

• Nothing is more important to the safety of a swimming child than the eyes of attentive parents.
• Keep a landline phone near the pool, so that if there is an emergency you can call 911 and the operator will be able to instantly trace the call and send help.
• Surround your pool with four-sided fencing and a gate that locks.
• Never leave children unattended in or near the pool. Drowning takes only a few seconds.
• Even when there is a group of adults present, make sure one is dedicated to keeping an eye on any children in or near the pool. Giving one person that responsibility makes it far more likely potential problems are noticed right away.
• Make sure your pool is outfitted with approved safety drain covers and an anti-entrapment device to prevent drain entrapment, the often deadly tragedy of a swimmer becoming trapped by a pool drain's suction. Public pools are required to adopt anti-entrapment measures by law, but PSC encourages private pool owners to follow suit.
• Take a CPR class to ensure potential drowning victims do not have to wait for paramedics to arrive.
• When not in use, keep hot tubs covered and locked.

This is the first summer that the Virginia Graeme Baker Pool and Spa Safety Act will be in place since the law's enactment in December. This law is designed to prevent the tragic and hidden hazard of drain entrapments and eviscerations in pools and spas. Between 1999 and 2008, there were 83 child entrapment incidents reported to the CPSC, including eleven fatality reports, one of them being the one that took 7-year old Virginia Graeme Baker's life in 2002. Under the law, all public pools and spas must comply with federal standards, which is great - but bear in mind that the accident that took Virginia's life happened at a private home. If you are a private pool owner, you may want to voluntarily comply with these standards, too - this news article provides compelling evidence for why.

Additional resources
Pool - spa safety and drowning prevention
Virginia Graeme Baker Pool and Spa Safety Act
National Drowning Prevention Alliance

Check your insurance coverage
In addition to talking every possible safety measure, pool owners also need to ensure that they are adequately covered against any potential risks. If you have a pool or hot tub or are considering adding one or the other, be sure you talk to your agent to ensure that you have appropriate coverage. Here's some advice from the Insurance Information Institute about swimming pool coverage:

Let your insurance company know that you have a ool, since it will increase your liability risk. Pools are considered an “attractive nuisance” and it may be advisable to purchase additional liability insurance. Most homeowners policies include a minimum of $100,000 worth of liability protection. Pool owners, however, may want to consider increasing the amount to $300,000 or $500,000.

You may also want to talk to your agent or company representative about purchasing an umbrella liability policy. For an additional premium of about $200 to $300 a year, you can get $1 million of liability protection over and above what you have on your home. This would also provide added liability protection when you drive.

If the pool itself is expensive, you should also have enough insurance protection to replace it in the event it is destroyed by a storm or other disaster.

Are you one of the 32.4 million Americans who will be traveling at least 50 miles from home this holiday weekend? If so, you may find some travel bargains - at least in comparison to last year. According to AAA, the average gas price is not expected to top $2.50 over the summer - a big drop from last year's price, which averaged about $3.80 on Memorial Day. AAA also reports that hotel rates are running about 7% to 12% less than last year.

The National Safety Council (NSC) reminds you to buckle up and drive defensively. NSC estimates there will be 366 traffic fatalities and an additional 19,400 nonfatal disabling injuries. And remember, from May 18 to May 31, the Click It or Ticket seat belt enforcement campaign will be in full force - law enforcement agencies join forces day and night, from coast-to-coast, for an enforcement blitz. The primary audience continues to be men ages 18 to 34, which research shows are less likely to wear seat belts.

Here are some holiday driving safety tips:

• Plan your trip before you go. Check the clickable map for national traffic and road closure information from the federal Highway Administration. Also, check to see if you can dial 511 to access traveler information in the state of your destination.
• Prepare your car. Ideally, you should have your car checked before long road trips. At minimum, check your gas, oil, windshield wiper fluid and tire pressure. Clean headlights and mirrors. Be sure you have a spare tire and the essentials in a roadside emergency kit.
• Be well rested. Driving can be hypnotic - if you are yawning or having trouble keeping focused, pull over and take a short nap. Even if you aren't sleepy, take a break every few hours to stretch your legs and keep alert.
• Allow extra time to reach your destination. Leave early and plan to avoid peak traffic hours, if possible.
• Wear your seat belt and ensure that all passengers wear theirs.
• Obey speed limits. Speeding is unsafe at the best of times and even more dangerous in heavy holiday traffic. And remember - it's also illegal. Police will be out in force over the long holiday weekend.
• Minimize distractions. Turn off the cell phone and bring games for the kids. Read your maps before you go, or pull over if you need to consult one.
• Don't tailgate. Keep a good distance from the car ahead of you to allow maximum reaction time. A good rule of thumb is one car length for every 10 miles of speed for cars. Double that for trucks.
• Use caution around trucks and large vehicles and give them a much wider berth. Don't pull out in front of them or brake suddenly because trucks require more stopping time. Only change lanes when you can see both of the truck's headlights in your rear view mirror. Be aware that truck divers can have many blind spots - pass on the left not on the right.
• Don't drink and drive. This should go without saying! Also be careful about overindulging in food - that can make you sleepy.
• Plan for emergencies. Bring phone numbers for your insurance agent and your insurer. Make sure your cell phone is fully charged. Bring a spare car key. The University of Oklahoma Police Department has a great emergency checklist that you can print out to ensure that you have all the info you would need should you run into an emergency or have a lost or stolen wallet.

Are you planning to live to be 100? There are about 250,000 centenarians alive today, including several hundred "supercentarians" aged 110+ years. You can get a good idea of your chances of joining their ranks with the Living to 100 Life Expectancy Calculator. This calculator asks you 40 quick questions related to your health and family history, and takes about 10 minutes to complete. It uses medical and scientific data to estimate how old you will live to be. In addition to estimating your life expectancy, it offers a "to-do" list for you and your physician, along with a list of things you can do differently and how many years you will likely add to your life if you do so.

This calculator was developed by Doctor Thomas Perls who is the founder and director of the New England Centenarian Study, the largest study of its kind in the world. We like it because it gets you thinking about lifestyle factors that can influence your odds. But for those of you who want a shortcut, you can get an estimate of your remaining years by viewing the life expectancy chart published by the Office of the Actuary of the Social Security Administration.

Interestingly, according to the CIA World Factbook's life expectancy chart ranking various countries, here in the U.S., we rank at #50 at 78 year and 11 months. Macau tops the chart with a life expectancy of 84.36 years. Meet a few of the oldest people on earth at this site, or view portraits and read the stories of some people whose lives span three centuries.

By the way, if you are planning to live to 100, make sure your retirement planning takes that into account - life expectancy is an important factor in your financial planning - talk to your insurance agent if you expect to join the ranks of centenarians!

Our workers' compensation service partner Lynch Ryan had previously posted this on their Workers" Comp blog - we thought it was important advice that bears repeating as we approach the summer months.

If you are a parent of a high school or college age kid, you are probably familiar with the quest for the summer job. Between Memorial Day and Labor Day, more than 2 million teen workers flock to the workplace, many for the first time. Think back to your first job - it can be an exciting thing to earn that first paycheck. It can also be very dangerous. Every year, about 70 teens are killed on the job and about a quarter of a million suffer injuries on the job. That means that about once every three minutes, a teen gets hurt at work.

All first-time workers are vulnerable to work injuries, teens especially so, often because of youthful feelings of invincibility. New workers aren't yet work hardened. Because they don't know their limits, they are more susceptible to overexertion, strains, and sprains. Young workers typically aren't seasoned enough to have good judgement about risks. Eager to make a good impression, they often don't want to ask for help, question authority, or call attention to themselves in any way.

Most work-related teen deaths occur as the result of motor-vehicles or as a result of machine related accidents. Agriculture has accounted for more than 40% of these fatalities, followed by the wholesale/retail trade, and construction. Frequent nonfatal injuries include lacerations, contusions, abrasions, sprains, or strains. Weather related injuries are also common - sunburns, heat exposure, and the like. The pattern of nonfatal injuries follows the most common types of employment: wholesale/retail and service industries.

Over the month, we'll follow up with more information on this topic. today, we'd like to address parents, and urge parents (or aunts, uncles, friends) to be proactive about teen worker safety:

Familiarize yourself with child labor laws in your state. Know the hours they can work, and restrictions on the type of work they can do. For example, according to the the American Society of Safety Engineers (ASSE):

" ...by law, your employer must provide protective clothing and equipment necessary for your job, payment for medical expenses if you are injured at work and training in on-the-job safety; and, that on a school day, a 15-year-old is only permitted to work up to three hours a day. Sixteen year-olds are limited to the type of work they can do. For instance, out of these jobs -- A. operating a meat slicing machine at a deli counter, B. driving a forklift at a warehouse, C. waiting tables at a restaurant, or D. performing demolition work at a construction site -- a 16 year-old is legally only allowed to work waiting tables.

... Teenagers are not allowed to work in mining, logging, meatpacking, roofing, excavation or demolition, according to labor laws. They cannot drive a car or forklift or work with saws, explosives, radioactive materials, or most machines."

Take a detailed interest in your teen's work - talk to your child about what they do on the job and talk specifically about safety matters. Ask a lot of questions:
-Do you work alone?
-Who is your supervisor? Is he or she in your work area with you?
-Do you use any equipment or machinery? Have you had training?
- What would you do if…

Trust your instincts - call or visit a workplace before your teen starts work. If you have any misgivings after work starts, follow-up with the boss or the supervisor.

Other resources for parents:
Department of Labor's Youth & Labor page
OSHA: Do you have a working teen?
Clocking in for Trouble - Teens and Unsafe Work
What teens need to know before going to work
Teen Workers: Avoid 2005’s Five Worst Jobs this Summer
Working the Smart Shift: Helping Parents Help their Teens Avoid Dangerous Jobs
Driving on the Job: New law for teen Workers
Teen Driving Safety
Your Teen at Work: Tips for Parents